Exhibit 10.2
EMPLOYMENT, NON-SOLICITATION, CONFIDENTIALITY
AND
NON-COMPETITION AGREEMENT
This Employment, Non-Solicitation, Confidentiality and Non-Competition
Agreement (the "Agreement") is entered into as of May 1, l995 (the "Effective
Date"), between Celerity Systems, Inc., a Tennessee corporation (the "Company"),
and Xx. Xxxxx Xxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, during the period prior to the Effective Date the Executive has
been employed as a senior executive officer of the Company pursuant to written
or oral agreements (the "Prior Agreements"), with the Company; and
WHEREAS, the Company desires to continue to employ the Executive as Vice
President and Secretary of the Company, and the Executive desires to continue
his employment with the Company, and to serve the Company in the capacity of
Vice President and Secretary;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the Company and the
Executive hereby agree as follows:
1. Employment
1.1 The Executive shall continue to serve as Vice President and Secretary
of the Company; and the Executive shall continue as a Director of the Company.
The Executive shall have such duties, responsibilities and authority as are
consistent with those positions.
1.2 The Executive, so long as he is employed hereunder, shall devote his
full professional time and attention to the services required of him as an
employee and director of the Company, except for paid vacation time of four (4)
weeks during each calendar year, subject to the Company's existing carry-over
vacation policy, and any reasonable periods of absence not to exceed a total of
three months in any calendar year due to sickness, personal injury or other
disability, shall use his best efforts to promote the interests of the Company,
and shall discharge his responsibilities in a diligent and faithful manner,
consistent with sound business practices.
1.3 The Executive shall report to the Board of Directors of the Company.
2. Term
The term of the Executive's employment under this Agreement shall be for a
term of five (5) years from the Effective Date, unless terminated sooner as
hereinafter provided (the "Employment Term").
3. Base Salary
The Company shall pay the Executive a salary during the Employment Term,
in equal installments no less frequently than monthly, in an annual amount equal
to not more than $125,000 (such amount as adjusted, from time to time, the
"Maximum Salary"). The Executive's Maximum Salary will be reviewed annually, and
shall be adjusted to reflect, among other things, cost of living, and be
increased to reflect achievement of performance criteria set by the Board of
Directors, all such adjustments and increases to be approved by the Board of
Directors of the Company, including the approval of at least one director who is
not an employee of, or a consultant to the Company.
4. Benefits
The Executive shall be entitled to participate in or receive benefits
under any employee benefit plan, arrangement or perquisite made available by the
Company now or in the future to its employees generally, or to its executives
and key management employees as a group. Nothing paid to the Executive under any
such plan, arrangement or perquisite presently in effect or made available in
the future shall be deemed to be in lieu of the Maximum Salary payable to the
Executive pursuant to this Agreement. Any payments or benefits payable to the
Executive hereunder in respect of any year during which the Executive is
employed by the Company for less than the entire such year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such year during which he is so employed.
5. Business Expenses
The Executive shall be entitled to receive prompt reimbursement for all
reasonable and customary expenses incurred by him in performing services
hereunder during the Employment Term; provided that such expenses are incurred
and accounted for in accordance with the policies and procedures established by
the Company and approved by the Board of Directors of the Company.
6. Termination
6.1 The Company may, upon giving the Executive thirty (30) days' notice,
terminate the Executive's employment for Cause (as defined below) or for
Disability (as defined below), subject to all provisions of this Agreement.
6.2 If the Executive is terminated for Cause, then all of the benefits to
which he was entitled during the Employment Term shall cease upon the date of
termination of his employment. If the Executive is terminated for Disability,
then all of the benefits to which he was entitled during the Employment Term
shall cease 90 days following the date of termination of his employment.
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6.3 For the purposes of this Agreement,
(a) the term "Cause" shall mean any of the following:
(i) continued failure by the Executive to perform
substantially his duties on behalf of the Company (other than any such failure
resulting from incapacity due to physical or mental illness or death), if the
Executive fails to remedy that breach within thirty (30) days of Company's
notice to the Executive of such breach; or (ii) material breach of any other
provision of this Agreement by the Executive, if the Executive fails to remedy
that breach within thirty (30) days of Company's notice to the Executive of such
breach; or (iii) any act of fraud, misappropriation, dishonesty, embezzlement or
similar conduct against the Company or any affiliate, or conviction of the
Executive for a felony or any crime involving moral turpitude (which conviction,
due to the passage of time or otherwise, is not subject to further appeal).
(b) the term "Disability" shall mean such physical or mental
disability or incapacity of the Executive as, in the good faith determination of
the Board, has prevented him from performing substantially all of his duties
hereunder during any period of 60 consecutive days or 60 days in any six month
period.
6.4 Upon termination of the Executive's employment for any reason, the
Executive shall resign from the Board of Directors of the Company and of any
subsidiary; such resignations shall be effective not later than the effective
date of termination of his employment.
6.5 The failure of the Company to nominate the Executive for election to
its Board of Directors at any shareholder meeting following the Effective Date,
or the failure of the Executive to be elected by the Company's shareholders to
the Board of Directors of the Company, shall not, absent other action by the
Company, constitute a termination of the Executive's employment as an executive
officer of the Company.
7. No Solicitation; Confidentiality; Competition
7.1 During the Restricted Period (defined below), neither the Executive
nor any Executive-Controlled Person (defined below) will, without the prior
written consent of the Board of Directors of the Company, directly or indirectly
solicit for employment, employ in any capacity or make an unsolicited
recommendation to any other person that it employ or solicit for employment any
person who is or was, at any time during the 12-month period prior to the
Restricted Period or during the Restricted Period, an officer, executive or key
employee of the Company or of any affiliate of the Company (any such officer,
executive or key employee being referred to hereafter as a "Company
Professional"). As used in this Agreement, the term "Executive-Controlled
Person" shall mean any company, partnership, firm or other entity as to which
the Executive possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.
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7.2 The Executive acknowledges that, through his status as President and
Chief Executive Officer of the Company and as a director of the Company, he has,
and will have, possession of important, confidential information and knowledge
as to the business of the Company and its affiliates, including, but not limited
to, knowledge of marketing and operating strategies, licensing and other
agreements, financial results and projections, future plans, the provisions of
other important contracts entered into by the Company and its affiliates,
possible acquisitions and similar information. The Executive agrees that all of
such knowledge and information constitute a vital part of the business of the
Company and its affiliates and are by their nature trade secrets and
confidential information proprietary to the Company and its affiliates
(collectively, "Confidential Information"). The Executive agrees that he shall
not, so long as the Company remains in existence, divulge, communicate, furnish
or make accessible (whether orally or in writing or in books, articles or any
other medium) to any individual, firm, partnership or corporation, any knowledge
or information with respect to Confidential Information directly or indirectly
useful in any aspect of the business of the Company or any of its affiliates. As
used in the preceding sentence, "Confidential Information" shall not include any
knowledge or information that: (a) is or becomes available to others, other than
as a result of breach by the Executive of this Section 7.2; (b) was available to
the Executive on a nonconfidential basis prior to its disclosure to the
Executive through his status as an officer or employee of the Company or any
affiliate; or (c) becomes available to the Executive on a nonconfidential basis
from a third party (other than the Company, any affiliate or any of its or their
representatives) who is not bound by any confidentiality obligation to the
Company or any affiliate.
7.3 During the Restricted Period, neither the Executive nor any
Executive-Controlled Person will render any services, directly or indirectly, as
an employee, officer, consultant or in any other capacity, to any individual,
firm, corporation or partnership engaged in the design, development, manufacture
or marketing of CD-WorkWare and VCD software, hardware or consulting services,
interactive video servers or related products and technology or similar
activities competitive with any activities in which the Company or any of its
affiliates is engaged at any time during the Restricted Period (such activities
being herein called the "Company Business"). During the Restricted Period, the
Executive shall not, without the prior written consent of the Company, hold an
equity interest in any firm, partnership or corporation which competes with the
Company Business, except that beneficial ownership by the Executive (including
ownership by any one or more members of his immediate family and any entity
under his direct or indirect control) of less than 2% of the outstanding shares
of capital stock of any corporation which may be engaged in any of the same
lines of business as the Company Business, if such stock is listed on a national
securities exchange or publicly traded in the over-the-counter market, shall not
constitute a breach of the covenants contained in this Section 7.3.
7.4 As used in this Agreement, "Restricted Period" shall mean the period
beginning on the date of the Executive's termination of employment for any
reason and ending on the date twenty-four (24) months thereafter.
7.5 The provisions contained in this Section 7 as to the time periods,
scope of activities,
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persons or entities affected, and territories restricted shall be deemed
divisible so that, if any provision contained in this Section 7 is determined to
be invalid or unenforceable, such provisions shall be deemed modified so as to
be valid and enforceable to the full extent lawfully permitted.
7.6 The Executive agrees that the provisions of this Section 7 are
reasonable and necessary for the protection of the Company and that they may not
be adequately enforced by an action for damages and that, in the event of a
breach thereof by the Executive or any Executive-Controlled Person, the Company
shall be entitled to apply for and obtain injunctive relief in any court of
competent jurisdiction to restrain the breach or threatened breach of such
violation or otherwise to enforce specifically such provisions against such
violation, without the necessity of the posting of any bond by the Company.
8. Amendments
This Agreement may not be altered, modified or amended except by a written
instrument signed by each of the parties hereto.
9. Assignment
Neither this Agreement nor any of the rights or obligations hereunder
shall be assigned or delegated by any party hereto without the prior written
consent of the other parties; provided, however, that any payments and benefits
owed to the Executive under this Agreement shall inure to the benefit of his
heirs and personal representatives.
10. Waiver
Waiver by any party hereto of any breach or default by any other party of
any of the terms of this Agreement shall not operate as a waiver of any other
breach or default, whether similar to or different from the breach or default
waived.
11. Severability
In the event that any one or more of the provisions of this Agreement
shall be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
12. Entire Agreement
This Agreement contains the entire understanding of the parties with
respect to the employment of the Executive by the Company. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein. This Agreement supersedes and terminates
all prior agreements, arrangements and understandings between the
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parties, whether oral or written, with respect to the employment of the
Executive, including, without limitation, the Prior Agreements referred to below
in Section 16.
13. Notices
All notices and other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive, to him as follows:
Xx. Xxxxx Xxxx
00000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
With a copy to:
-----------------
-----------------
If to the Company, to it as follows:
Celerity Systems, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Chairman of the Board
With a copy to:
Xxxxxx & Xxxxxx
Suite 1000, Volunteer Building
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxx, Xx., Esq.
or to such other address or such other person as the Executive or the Company
shall designate in writing in accordance with this Section 13, except that
notices regarding changes in notices shall be effective only upon receipt.
14. Headings
Headings to Sections in this Agreement are for the convenience of the
parties only and are
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not intended to be a part of, or to affect the meaning or interpretation of,
this Agreement.
15. Governing Law
This Agreement shall be governed by the laws of the State of Tennessee
without reference to the principles of conflict of laws. Each of the parties
hereto consents to the jurisdiction of the federal and state courts of the State
of Tennessee in connection with any claim or controversy arising out of or
connected with this Agreement. Service of process in any such proceeding may be
made upon each of the parties hereto at the address of such party as determined
in accordance with Section 13 of this Agreement, subject to the applicable rules
of the court in which such action is brought.
16. Termination of Prior Agreements; Release of Rights
Upon the Effective Date, all Prior Agreements shall be terminated and of
no further force and effect. In consideration of the execution and delivery by
the Company of this Agreement, the Executive waives any rights he may have
pursuant to the Prior Agreements.
IN WITNESS WHEREOF, the Company and the Executive have caused this
Agreement to be executed as of the date first above written.
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
CELERITY SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxx
Title:
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